Real Madrid and Barça have already found the ‘made in Spain’ formula to collect the benefits of the German ownership model. Now, if the Bundesliga is about giving investors access to all football-related operations, the two LaLiga transatlantic liners have chosen to be even more specific and limit these alliances to some of the most profitable businesses.
There is an appetite to join these two clubs: Sixth Street and Legends will pay 360 million euros for 30% of the company that will operate the Santiago Bernabéu for 30 years, while Investindustrial and Fanatics are negotiating to pay 200 million for 49% of the arm of Blaugrana merchandising.
In the absence of details and for the second to become official, both operations are traced. These are consortiums in which the club puts the really valuable assets, an investment firm injects the economic resources and a specialized company is in charge of putting that money to work so that the business grows. And yes, both associations demand that there be a distribution of profits that did not occur before, but the theory says that these will be greater than those that would occur if Barça and Madrid continued alone.
Both clubs have almost traced the operations. These are consortiums in which the club puts the really valuable assets, an investment firm injects the economic resources and a specialized company is in charge of putting that money to work so that the business grows
In my opinion, this type of operation has two very clear advantages. The first is that they allow two social clubs, without large billionaires behind them, to capitalize significantly and not always have to resort to debt for strategic projects.
45% of the cost of the works
In the case of Madrid, those 360 million are equivalent to 45% of the cost of the works and a third of the money to be returned to the banks. As for Barça, it is true that today these asset sales are more aimed at restoring the economic situation, but it is equally important and a way to speed up that recovery in a still complex environment.
Giving independence to the managers of certain strategic businesses allows access to professionals who would not otherwise be recruitable
Related news
The second advantage is access to talent. Giving independence to the managers of certain strategic businesses allows access to professionals who would not otherwise be recruitable, and distances their management from the constant scrutiny and social dynamics of clubs like Barça and Madrid.
fait accompli
As for the forms, I am more inclined towards those of the board of Joan Laporta than those of Florentino Perez. Although I am a firm defender that the assemblies and the partners should have very limited what they can decide and not about the business, I think that the most honest thing is to request authorization prior to the sale of assets. It is what Barça did by going to the endorsement of the compromisarios because Laporta set up an appointment to debate this matter, while Madrid has gone down the path of fait accompli. Who will say no to 360 million that are well worth a transfer?
The difficult sustainability of the ACB League
It’s nothing new, but that’s not why you have to let it go. As every year, the Higher Sports Council (CSD) has published its economic report on Spanish basketball, and the result is once again devastating: the losses of the ACB teams amounted to 80.9 million euros in 2020-2021, the 90% of which are attributable to Barça and Madrid, who finance their bet on the basket with football, and Valencia Basket, supported one more year by the Roig family. However, only three teams managed to close with benefits.
The economic -and competitive- problem is that the ACB needs these three teams to sell its national product to televisions and sponsors, but Barça, Madrid and Valencia budget with a logic more of international competition than local. And that means that there is an abysmal distance between them that makes it less attractive.
The drama only comes in the playoffs and the Cup, a very successful product. And the solution will not come in the short term, since the evolution of the discipline makes it clear that it will hardly be able to generate an ordinary business capable of covering the losses that the teams assume annually. Neither here, nor in the Euroleague.